In previous years, stakeholders such as customers, supplier, employees, community groups, governments and even some shareholders have encouraged firms to take on further investments in corporate social responsibility. It has become a strong tradition for businesses in the western world to socially responsible.
The demand for companies to carry out their business in a socially responsible and ethical manner is increasing with pressure from the media, local communities, customers, charities and the civilian society in general.
This wiki will consider whether Corporate Social Responsibility is a new management trend within business in the present day. It will look at what exactly CSR is, the history of CSR, the reasons why businesses want to improve it and examples of different CSR initiatives used by companies when trying to improve it.
Definition
CSR is a theory with a number of different definitions and practices. It is a significantly broad theory that addresses multiple and a variety of topics such as human rights, corporate governance, health and safety, effects on the environment, conditions of the workplace of employees and contribution to economic development. Regardless of what the definition is, the motive of CSR is to steer change toward improving sustainability.
Different Types of CSR
There are four major areas of Corporate Social Responsibility that businesses tend to engage in. There are as follows:
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities
Economic Responsibilities
Economic responsibility is a business’ first and most important responsibility. That being said, the company also needs to be primarily concerned with turning a profit. As if the company is unable to do this then it will not last, employees will have to be laid off and taking care of their social responsibilities will be the last thing that the company will have to worry about. A company first needs to ensure it can be profitable and do well before it can start putting effort into being a good corporate citizen.
Legal Responsibilities
Following up to ensuring that the company is profitable, the most crucial responsibility is ensuring that the company obeys all of the laws that are in place. Legal responsibilities can vary from security rulings to environmental law, labour law and even criminal law.
Ethical Responsibilities
Two of the biggest obligations required by a business are its legal and economic responsibilities. A business can then involve itself with the ethical responsibilities after these two fundamental obligations are met. Ethical responsibilities are duties that a business gives itself as its executives trust it's the most appropriate action to take and not only because they have a duty to do so. Ethical responsibilities often include paying fair wages, being friendly to the environment, or declining to do business with harsh, repressive nations or unethical companies.
Philanthropic Responsibilities
When a business is capable of meeting all of the previous responsibilities, it can then start focusing on its philanthropic responsibilities. These responsibilities are responsibilities that surpasses what the company believes is right and go above and beyond what is simply required. They entail making an effort to aid society such as, taking part in projects that will aid the environment, contributing services to community organizations, or donating funds to charity.
History of CSR
1960s & ‘70s
In these decades, corporate social responsibility examples started to appear with environmentalism, consumerism and the civil rights movement considerably starting to alter the way society expected the word of business to conduct itself.
In 1960, the Organisation for Economic Co-operation and Development (OECD) was established. This was created to encourage policies that will “improve the economic and social well-being of people around the world.” (OECD, 2017)
The OECD was formerly the Organisation for European Economic Co-operation until Canada and the US joined in 1960. The OECD is currently comprised of 35 countries which make up 80% of the world’s trade and investment, granting it a focal part in addressing problems facing the world economy.
The use of the term ‘CSR’ started to become a common thing in the 1970s along with numerous attempts to give an official definition to the expression.
The ever-growing requirement to discover a common ground between both businesses and their local communities throughout the world to preserve the environment was considered in 1972 at the UN conference in Stockholm.
The United Nations Environment Programme was then created following the conference in Stockholm as well as a number of other national environmental protection agencies.
1980s & 90s
In 1980, the World Conservation Strategy was released by the International Union for Conservation of Nature. The terms of trade, population, poverty, and social inequality were identified as the main culprits for habitat destruction.
The UN earth Summit took place in 1992 in Rio de Janeiro. The ‘triple bottom line’ model was introduced by the summit as well the suggestion of a company gaining a competitive advantage through sustainable development.
2000 Onwards
New acquisitions and mergers were made in the year 2000 than in any other year in history. The multinational ‘Partners for Progress’ conference in November in Paris. This conference focussed on the significance for companies to embrace socially responsible etiquette, in an attempt to move toward sustainable local growth.
The world’s first minister for CSR was appointed in the UK by the British Government in the spring of 2000.
Benefits of CSR
A critical force of CSR is the influence it can have as a way of enhancing competitiveness and as a method of lowering costs and generating fresh value within a business. As most businesses have a main goal of being profitable, through CSR this can be done in a fashion that keeps all of the stakeholders happy. A company’s owners, workers and local community can be benefitted by them managing their environmental, economic and societal responsibilities in an ethical way.
CSR can bring real advantages and can have positive influences in the following areas:
Initiating and growing connections with suppliers and networks
Lowering operating costs and energy cost as well risk management
Gaining new business and improving consumer retention
Maintaining a motivated and happy workforce and retaining and attracting valuable staff
Improving the company’s corporate image
Greater chance of investing in the company
Therefore by taking a strategic approach to CSR it can result it in numerous potential advantages.
Triple Bottom Line
The phrase ‘Triple Bottom Line’ was introduced by John Elkington in 1994. The triple bottom line model is used to measure a business’s level of social responsibility, impact on the environment and its economic value.
The triple bottom line is meant to move along the objective of sustainability within a business’s practice. The basis of businesses is broadened past simply just making a profit to incorporate environmental and social matters with the end goal of measuring full cost of doing business. The components that make up the triple bottom line are referred to as “people, profits and planet”. (Investopedia, 2016)
CSR in HRM
Managers in the human resource departments within companies are in a key position to play an influential part in aiding the company to get to where it wants to be when it comes to being an environmentally and socially responsible firm.
As the HR department in any company holds a sway over numerous important business systems and processes supporting successful delivery, it puts the department in a good position to promote CSR principles and attain a strongly performing CSR culture within the company. When it comes to the ‘people’ part of the triple bottom line, the HR department can play a significant role in ensuring that what the company says publicly associates with how the people are actually treated within the company. HR is also in an excellent position that makes them capable of providing the structure and tools required for the board of directors and chief executive of a company to insert a CSR morale and culture into the corporate image and strategy of the business.
The Society for Human Resource Management carried out a study on human resource practitioners in 2006. This revealed that CSR practices are seen as important to employee morale (50%), loyalty (41%), retention (29%), recruitment of top employees (25%) and productivity (12%). [Note that percentages reflect Canadian responses] (SHRM, 2007, p. 27).
CSR is important for HRM when it comes to recruitment. When companies are competing to attract the most talented people to fill their job roles, more and more people are beginning to desire working for an ethical company with a good corporate image. This will result in an increasing amount of businesses attempting to define their core values and becoming socially responsible and HR are in the best position to enable them to do so. Strong CSR helps to attract and retain a high standard of employees. Staff turnover can result in increased operating costs, loss of business competitors and reduced customer service standards. (Grant Thornton, 2008) Therefor, if HR develop a strong strategy for talent management and performance and implant CSR elements into it may reduce th
e impact and chances of losing staff.
==
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Examples of Companies focusing on CSR
Tesco
As one of the largest retailers in the world it is of upmost importance that Tesco focus strongly on their Corporate Social Responsibility as they employ over 476,000 people across 11 countries.
Tesco focus on 6 major areas when it comes to their Corporate Social Responsibility:
Food Waste
Health
Human rights and Labour standards
Environment
Supplier Relationships
Business ethics and anti-bribery
Food Waste:
Only one of the top UK food retailers to publish data for their own operations on UK food waste.
Made a commitment in their UK stores that no food that is fit for human consumption will go to waste, by the start of 2018.
Programmes of excess food donations have been rolled out cross the group.
Health:
The sugar content of all of their soft drinks are cut by 5% on average annually.
In their large UK stores, free fruit is provided for children.
Tesco have a national charity partnership with The British Heart Foundation and Diabetes UK, in which they have raised more than £13.7 million for.
Human Rights and Labour Standards:
Across the globe Tesco have 42 responsible sourcing experts locally based.
In the past 2 years Tesco’s social programmes have supported almost 450,000 people in the local communities that they source from.
In 2016 they were shortlisted for the Stop Slavery Award by the Thomson Reuters Foundation.
Environment:
Absolute carbon emissions produced by Tesco have been reduced by 3.1% year after year.
The Marine Stewardship Council label scheme for pre-packed and frozen fish has been expanded.
Tesco led the way with the Sustainable Agriculture Initiative by becoming the first UK retailer to join it.
Supplier Relationships:
Across Central Europe and the UK Tesco have standardised their payment terms.
Following the successful launch of a supplier helpline and website in the UK in 2015, these have now been launched in Central Europe and Thailand.
The 2016 annual survey by Groceries Code Adjudicators has recognised Tesco as the most improved retailer.
Business ethics and anti-bribery:
A refreshed Code of Business Conduct was launched.
Relevant training programmes were refreshed for colleagues on income recognition, antibribery and supplier codes.
An awareness campaign was launched for their ‘Protector Line’ whistleblowing hotline.
As you can see from the video, Tesco focus a lot on:
Local community; schools, charities etc.
Fundraising – Total of almost £75 million by 2012
Tackling climate change – aiming for zero carbon
Helping decrease unemployment levels
Equality in gender in employment
The Co-operative
The Co-operative is one of the world’s largest co-operatives and is owned by millions of members. It has over 2500 local stores making it the fifth largest food retailer in the UK and it is also: the UK’s predominant funeral provider, a considerable insurer and a legal services business.
Being owned by this many members and being responsible for so many business activities, it is important for The Co-op to focus heavily on their Corporate Social Responsibility in order to keep up the success and reputation of the brand.
A quote from The Co-op’s ‘Ethical Plan 2013-15’:
“The Co-operative has always had a purpose beyond profit, and recognises that some things are plainly unjust and need to be tackled, with or without a business case. We’ve learnt that we need to manage and develop our business in a sustainable manner, and will always be transparent and accountable in our pursuit of this. We are guided by the long-established co-operative values of self-help, self-responsibility, democracy, equality, equity and solidarity.”
There are 8 major areas that the Co-op focus on when it comes to their CSR:
Democratic Control and Reward
Supporting Co-operatives
Keeping Communities Thriving
Inspiring Young People
Protecting the Environment
Tackling Global Poverty
Responsible Retailing
Responsible Finance
In the video below is the Head of Energy Enterprise & Sustainable Development for The Co-op discussing CSR within the organisation:
What is a New Trend in Management?
A trend is a general development or change in a situation or in the way that people are behaving. In this case the trend will be which methods of management are currently being used in the modern world of business.
Management is the organization and coordination of the activities of a business in order to achieve defined objectives. (Business Dictionary, 2017)
Taking both of these definitions into account we can now conclude that a new trend in management is a new method or behaviour that is being used to coordinate and organise business activities to reach their set goals.
Is CSR a new trend in management?
As we can see from the long list of pivotal Corporate Social Responsibility events within history, this shows that the idea of CSR is certainly not new. But as the years goes on it has become a much more important focus point for governments and businesses due to the increasing push for environmental protection, human rights and ethical business trading by worldwide organisations.
It is certainly a trend in management as focusing on Corporate Social Responsibility ensures that you cover the economic aspects of the business, make sure that it is profitable as well as the legal, ethical and philanthropic aspects. Managing all of these appropriately will build the foundations for a successful business.
Conclusion
We can conclude that CSR is a very important management trend as it has many benefits such as cost savings and staff retention. CSR is especially important within Human Resource management as this is where the main driving force for it can come from. It is currently being used by a majority the successful businesses and organisations across the world. It is not a new trend in management overall but is becoming for popular and being adopted by more and more organisations as time goes on.
CSR - Corporate Social Responsibility (266581)
Table of Contents
In previous years, stakeholders such as customers, supplier, employees, community groups, governments and even some shareholders have encouraged firms to take on further investments in corporate social responsibility. It has become a strong tradition for businesses in the western world to socially responsible.
The demand for companies to carry out their business in a socially responsible and ethical manner is increasing with pressure from the media, local communities, customers, charities and the civilian society in general.
This wiki will consider whether Corporate Social Responsibility is a new management trend within business in the present day. It will look at what exactly CSR is, the history of CSR, the reasons why businesses want to improve it and examples of different CSR initiatives used by companies when trying to improve it.
Definition
CSR is a theory with a number of different definitions and practices. It is a significantly broad theory that addresses multiple and a variety of topics such as human rights, corporate governance, health and safety, effects on the environment, conditions of the workplace of employees and contribution to economic development. Regardless of what the definition is, the motive of CSR is to steer change toward improving sustainability.
Different Types of CSR
There are four major areas of Corporate Social Responsibility that businesses tend to engage in. There are as follows:
Economic Responsibilities
Economic responsibility is a business’ first and most important responsibility. That being said, the company also needs to be primarily concerned with turning a profit. As if the company is unable to do this then it will not last, employees will have to be laid off and taking care of their social responsibilities will be the last thing that the company will have to worry about. A company first needs to ensure it can be profitable and do well before it can start putting effort into being a good corporate citizen.Legal Responsibilities
Following up to ensuring that the company is profitable, the most crucial responsibility is ensuring that the company obeys all of the laws that are in place. Legal responsibilities can vary from security rulings to environmental law, labour law and even criminal law.Ethical Responsibilities
Two of the biggest obligations required by a business are its legal and economic responsibilities. A business can then involve itself with the ethical responsibilities after these two fundamental obligations are met. Ethical responsibilities are duties that a business gives itself as its executives trust it's the most appropriate action to take and not only because they have a duty to do so. Ethical responsibilities often include paying fair wages, being friendly to the environment, or declining to do business with harsh, repressive nations or unethical companies.Philanthropic Responsibilities
When a business is capable of meeting all of the previous responsibilities, it can then start focusing on its philanthropic responsibilities. These responsibilities are responsibilities that surpasses what the company believes is right and go above and beyond what is simply required. They entail making an effort to aid society such as, taking part in projects that will aid the environment, contributing services to community organizations, or donating funds to charity.History of CSR
1960s & ‘70s
1980s & 90s
2000 Onwards
Benefits of CSR
A critical force of CSR is the influence it can have as a way of enhancing competitiveness and as a method of lowering costs and generating fresh value within a business. As most businesses have a main goal of being profitable, through CSR this can be done in a fashion that keeps all of the stakeholders happy. A company’s owners, workers and local community can be benefitted by them managing their environmental, economic and societal responsibilities in an ethical way.
CSR can bring real advantages and can have positive influences in the following areas:
Therefore by taking a strategic approach to CSR it can result it in numerous potential advantages.
Triple Bottom Line
The phrase ‘Triple Bottom Line’ was introduced by John Elkington in 1994. The triple bottom line model is used to measure a business’s level of social responsibility, impact on the environment and its economic value.
The triple bottom line is meant to move along the objective of sustainability within a business’s practice. The basis of businesses is broadened past simply just making a profit to incorporate environmental and social matters with the end goal of measuring full cost of doing business. The components that make up the triple bottom line are referred to as “people, profits and planet”. (Investopedia, 2016)
CSR in HRM
Managers in the human resource departments within companies are in a key position to play an influential part in aiding the company to get to where it wants to be when it comes to being an environmentally and socially responsible firm.
As the HR department in any company holds a sway over numerous important business systems and processes supporting successful delivery, it puts the department in a good position to promote CSR principles and attain a strongly performing CSR culture within the company. When it comes to the ‘people’ part of the triple bottom line, the HR department can play a significant role in ensuring that what the company says publicly associates with how the people are actually treated within the company. HR is also in an excellent position that makes them capable of providing the structure and tools required for the board of directors and chief executive of a company to insert a CSR morale and culture into the corporate image and strategy of the business.
The Society for Human Resource Management carried out a study on human resource practitioners in 2006. This revealed that CSR practices are seen as important to employee morale (50%), loyalty (41%), retention (29%), recruitment of top employees (25%) and productivity (12%). [Note that percentages reflect Canadian responses] (SHRM, 2007, p. 27).
CSR is important for HRM when it comes to recruitment. When companies are competing to attract the most talented people to fill their job roles, more and more people are beginning to desire working for an ethical company with a good corporate image. This will result in an increasing amount of businesses attempting to define their core values and becoming socially responsible and HR are in the best position to enable them to do so. Strong CSR helps to attract and retain a high standard of employees. Staff turnover can result in increased operating costs, loss of business competitors and reduced customer service standards. (Grant Thornton, 2008) Therefor, if HR develop a strong strategy for talent management and performance and implant CSR elements into it may reduce th
e impact and chances of losing staff.
==
==
Examples of Companies focusing on CSR
Tesco
As one of the largest retailers in the world it is of upmost importance that Tesco focus strongly on their Corporate Social Responsibility as they employ over 476,000 people across 11 countries.Tesco focus on 6 major areas when it comes to their Corporate Social Responsibility:
Food Waste:
Health:
Human Rights and Labour Standards:
Environment:
Supplier Relationships:
Business ethics and anti-bribery:
As you can see from the video, Tesco focus a lot on:
The Co-operative
The Co-operative is one of the world’s largest co-operatives and is owned by millions of members. It has over 2500 local stores making it the fifth largest food retailer in the UK and it is also: the UK’s predominant funeral provider, a considerable insurer and a legal services business.Being owned by this many members and being responsible for so many business activities, it is important for The Co-op to focus heavily on their Corporate Social Responsibility in order to keep up the success and reputation of the brand.
A quote from The Co-op’s ‘Ethical Plan 2013-15’:
“The Co-operative has always had a purpose beyond profit, and recognises that some things are plainly unjust and need to be tackled, with or without a business case. We’ve learnt that we need to manage and develop our business in a sustainable manner, and will always be transparent and accountable in our pursuit of this. We are guided by the long-established co-operative values of self-help, self-responsibility, democracy, equality, equity and solidarity.”
There are 8 major areas that the Co-op focus on when it comes to their CSR:
In the video below is the Head of Energy Enterprise & Sustainable Development for The Co-op discussing CSR within the organisation:
What is a New Trend in Management?
A trend is a general development or change in a situation or in the way that people are behaving. In this case the trend will be which methods of management are currently being used in the modern world of business.
Management is the organization and coordination of the activities of a business in order to achieve defined objectives. (Business Dictionary, 2017)
Taking both of these definitions into account we can now conclude that a new trend in management is a new method or behaviour that is being used to coordinate and organise business activities to reach their set goals.
Is CSR a new trend in management?
As we can see from the long list of pivotal Corporate Social Responsibility events within history, this shows that the idea of CSR is certainly not new. But as the years goes on it has become a much more important focus point for governments and businesses due to the increasing push for environmental protection, human rights and ethical business trading by worldwide organisations.
It is certainly a trend in management as focusing on Corporate Social Responsibility ensures that you cover the economic aspects of the business, make sure that it is profitable as well as the legal, ethical and philanthropic aspects. Managing all of these appropriately will build the foundations for a successful business.
Conclusion
We can conclude that CSR is a very important management trend as it has many benefits such as cost savings and staff retention. CSR is especially important within Human Resource management as this is where the main driving force for it can come from. It is currently being used by a majority the successful businesses and organisations across the world. It is not a new trend in management overall but is becoming for popular and being adopted by more and more organisations as time goes on.
References
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Corporate Responsibility Review 2012. (2012) Available at: https://www.youtube.com/watch?v=GwznBBI5t4k (Accessed: 08/02/17).
Business Dictionary Management. Available at: http://www.businessdictionary.com/definition/management.html (Accessed: 08/02/17).
Cambridge Dictionary Trend. Available at: http://dictionary.cambridge.org/dictionary/english/trend (Accessed: 08/02/17).
CforE In CSR Brief History of CSR. Available at: https://www.cim.org/en/CIMSubSites/CentreForExcellence/About-Us/Brief-history-of-CSR (Accessed: 03/08/17).
CSR Hub (2017) Benefits of CSR. Available at: http://www.csrhub.ie/Benefits-of-CSR-/ (Accessed: 03/08/17).
Ekington, J. (1997) Cannibals with Forks: the Triple Bottom Line of 21st Century Business. Capstone.
FTSE Russell (2017) FTSE4Good Index Series
Available at: http://www.ftse.com/products/indices/ftse4good (Accessed: 08/02/17).
Grant Thornton (2008) Corporate Social Responsibility: a necessity not a choice. Grant Thornton. Available at: http://www.grantthornton.es/publicaciones/gestionEmpresarial/2008_AHGT.es_IBR_RSC.pdf (Accessed: 03/08/17).
Investopedia (2016) Triple Bottom Line. Available at: http://www.investopedia.com/terms/t/triple-bottom-line.asp (Accessed: 03/08/17).
Lexicon Definition of corporate social responsibility (CSR). Available at: http://lexicon.ft.com/Term?term=corporate-social-responsibility--(CSR) (Accessed: 03/02/17).
McWilliams, A. and Siegel, D. (2000) 'Corporate Social Responsibility and Financial Performance: Correlation or Misspecification?', 21(Strategic Management Journal), pp. 603.
OECD (2017) History. Available at: http://www.oecd.org/about/history/ (Accessed: 03/08/17).
OECD (2017) Our Mission. Available at: http://www.oecd.org/about/ (Accessed: 03/08/17).
Scilly, M. Four Types of Corporate Social Responsibility. Available at: http://smallbusiness.chron.com/four-types-corporate-social-responsibility-54662.html (Accessed: 03/02/17).
Tesco (2017) Our business. Available at: https://www.tescoplc.com/about-us/our-businesses/ (Accessed: 08/02/17).
Tesco (2017) An update on our Corporate Responsibility commitments. Available at: https://www.tescoplc.com/media/391787/corporate-responsibility-update_nov-2016-final.pdf (Accessed: 08/02/17).
The Co-op Our Co-op. Available at: https://www.co-operative.coop/about-us/our-co-op (Accessed: 08/02/17).
The Co-op Our Ethical Plan 2013-15. Available at: http://www.coop.co.uk/Corporate/CSR/Ethical%20Plan%202013-15.pdf (Accessed: 08/02/17).
The Economist (2009) Triple bottom line. Available at: http://www.economist.com/node/14301663 (Accessed: 08/02/17)